PROTECTIONISM CAN AGGRAVATE THE WORLD FOOD CRISIS AND EXPAND WORLD HUNGER

In India, restrictions were imposed on wheat and sugar exports. Malaysia announced this week the ban on foreign sales of chicken. Indonesia has limited palm oil exports.

There is a global wave of protectionism aimed at guaranteeing domestic supply in countries that are adopting measures to restrict food exports. Since the beginning of the conflict in Eastern Europe, there have been 43 restrictions on the export of food and fertilizers around the world, a scenario that led the World Bank to predict that wheat prices should rise by more than 40% in 2022.

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Threat of hunger

Hunger has increased around the world in the face of the economic impacts of the covid pandemic, but the situation has become particularly serious in Brazil: the share of Brazilians who did not have the money to feed themselves or their family, for some period in the last 12 months, rose from 30% in 2019 to 36% in 2021, a record level in the historical series started in 2006. It is also the first time that the level of food insecurity in Brazil exceeds the world average.

Agricultural protectionism has reached its highest level since the 2008 global crisis, says Sabrin Chowdhury, head of Commodities at Fitch Solutions. She says that since the beginning of the war in Ukraine, at least 30 countries have adopted measures to restrict food exports.

“This movement should increase throughout 2022 and threaten the food security of the most vulnerable countries”, she assesses.

The United Nations estimates that food prices have risen 70% since mid-2020 and are at record highs.

“Higher food prices affect disproportionately among the poorest families, who spend a large part of their income on food. Even in the US and UK, the poorest are facing increasing difficulties to feed themselves,” says Sonia Akter, professor of Agriculture at the National University of Singapore.

For residents of sub-Saharan African countries, for example, 40% of consumption corresponds to food, said Gopinath. In addition to a “major impact on the cost of living”, the price hikes have also intensified storage by governments.

Contributions of War in Ukraine

“We were already facing an extraordinary food crisis before Ukraine, transport costs, commodity prices and food were already doubling, tripling, quadrupling,” said David Beasley, executive director of the United Nations Food Programme.

The number of people "on the way to starvation" has grown from 80 million to 276 million in the last four or five years, Beasley told Reuters in an interview in Davos.

Russia's invasion of Ukraine, which Moscow describes as a "special military operation", has led to a sudden tightening of a crisis that was already underway.

“Keeping ports closed while Ukraine's harvest season is coming in July and August means declaring war on the global food supply,” Beasley said.

"It's very important that the world's leaders can sit at the table calmly and talk about how we are going to manage trade, food and investment," Jay Collins, vice president of banking, capital markets and consulting at Citigroup, told Reuters Global Forum. Markets in Davos.

Sources:

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